China's PMI Decreased in June National Bureau of Statistics of China 2012-07-03 14:00:33 Department of Service Statistics of NBS
China Federation of Logistics and Purchases (CFLP)
In June, China's manufacturing purchasing managers index (PMI) was 50.2 percent, down by 0.2 percentage points month-on-month.
In view of the sizes of enterprises, the PMI of large-sized enterprises was 50.6 percent, decreased 0.5 percentage points, month-on-month, continuing stay above the threshold, that of medium-sized enterprises was 50.0 percent, staying above the threshold, that of small-sized enterprises was 47.2 percent, continuing to stay below the threshold for 3 consecutive months.
In June, among the five sub-indices composing PMI, two sub-indices increased, while of the other three sub-indices decreased.
Production index was 52.0 percent, decreased 0.9 percentage points month-on-month, which indicating that manufacturing production growth continued to slow down. In view of different industries, the production indices of textile wearing apparel manufacturing, electrical machinery and equipment manufacturing, railways, ship, aerospace and other transportation equipment manufacturing, foods, liquor, beverages and fine tea manufacturing, tobacco manufacturing positioned in a high place which above 60 percent, the production outputs increased dramatically month-on-month, the production indices of processing and coking of petroleum, chemical fiber manufacturing, rubber and plastic manufacturing, automobile manufacturing, special equipment manufacturing, textile manufacturing, and non-metallic mineral products manufacturing positioned below the threshold, the production of enterprises decreased in various degrees, month-on-month.
In June, the new orders index was 49.2 percent, fell by 0.6 percentage points month-on-month, continuing stay below the threshold for 2 consecutive months, which indicated that the market demand continued to decrease. In view of different industries, the new orders indices of foods, liquor, beverages and fine tea manufacturing, fabricated metal products manufacturing, tobacco manufacturing, electrical machinery and equipment manufacturing, and textile wearing apparel manufacturing kept stable increasing. The sluggish market demands of textile manufacturing, processing and coking of petroleum, chemical materials and chemical products manufacturing, automobile manufacturing, chemical fiber manufacturing, rubber and plastic manufacturing demand showed a significant reduction in business orders. In addition, the survey results showed that foreign new orders index which reflects the situation of foreign trade of manufacturing was 47.5 percent, positioned below the threshold, and down 2.9 percentage points month-on-month, which was the biggest drop since December 2011; the import index was 46.5 percent, decreased 1.6 percentage points month-on-month, continuing stay below the threshold for 2 consecutive months, which indicated that manufacturing orders from foreign products and raw materials imports have been reduced, month-on-month.
Main raw materials inventory index was 48.2 percent, up by 3.1 percentage points month-on-month, still staying below the threshold, which indicated that manufacturing inventories of raw materials continued to decline. In view of different industries, the main raw materials inventory indices of processing and coking of petroleum, railways, ship, aerospace and other transportation equipment manufacturing, and tobacco manufacturing increased significantly, jumped above 50 percent from below the threshold with a sharp increase in raw material inventory; that of textile manufacturing, automobile manufacturing, special equipment manufacturing, smelting and processing of non-ferrous metal ores, processing of timber, and furniture manufacturing were consecutive located below the threshold.
Employed person index was 49.7 percent, decreased 0.8 percentage points month-on-month, fell below the threshold, which indicated that the demand growth of manufacturing employment slightly slowed down, month-on-month. In view of different industries, employed person of railways, ship, aerospace and other transportation equipment manufacturing, chemical materials and chemical products manufacturing, non-metallic mineral products manufacturing, textile and apparel manufacturing, paper and printing industry, and cultural, educational, sporting goods manufacturing increased, that of automobile manufacturing, special equipment manufacturing, general equipment manufacturing, and textile manufacturing decreased month-on-month.
Supplier delivery time index was 49.1 percent, 0.1 percentage points higher month-on-month, still staying below the threshold.
In addition, the main raw material purchase price index was 41.2 percent, significant downturn in 3.6 percentage points month-on-month, positioned below the threshold for 2 consecutive months, which indicated that the manufacturing main raw material purchase price fell significantly. In view of different industries, the month-on-month prices of the main raw materials of the tobacco industry increased, the main raw material purchase price indices of agro-food processing industry, processing of timber, furniture manufacturing, was 50.0 percent, little change in corporate procurement costs over the previous month, the main raw material purchase price indices of other manufacturing industries fell in varying degrees over the previous month.
In addition, the produced finished goods inventory index rose to 52.3 percent month-on-month, 0.1 percentage points higher than the previous month, was s new high of in nearly seven months, which indicated that the pressure of finished goods inventory of manufacturing enterprises continuing to increase.
Annotations:
1. Explanatory Notes
Purchasing Managers Index (PMI): refers the index through the monthly summarized and compiled statistics of enterprises purchasing managers, which covers enterprises purchasing, production, logistics, and other links, is one of the leading index which common adopted by international to monitoring the macroeconomic trends, played an important role on strong forecasting and monitoring. The threshold of PMI is usually using 50 percent as the cut-off point of economy strength, PMI above 50 percent reflects the manufacturing economic is expanding; less than 50 percent reflects narrowing.
2.Statistical Coverage
Involving 31 manufacturing industry categories in the “Industrial Classification for National Economic Activities” (GB/T4754-2011), the survey was conducted in 820 sampling enterprises countrywide.
3. Survey Methods
Manufacturing purchasing managers’ survey was conducted in PPS (Probability Proportional to Size) sampling method, using the manufacturing sectors as the selecting layers, distribution of sample size was according to their value-added accounted for the proportion of total manufacturing value-added, and samples within layers and the main business revenue of the enterprises were selected by the PPS.
The survey was conducted by Direct Reporting of Statistics Networking and carried through the monthly interview to enterprises’ purchasing managers.
4. Calculation Methods
Manufacturing purchasing managers survey involving 11 questions on production, new orders, export orders, existing orders, finished goods inventory, purchase, import, purchase prices, raw materials, inventory, employees, suppliers, delivery time, and etc.. Diffusion index was calculated on each question, i.e. percentage of positive answers in number of enterprises plus half of the percentage in the same answers.
PMI is a composite index, which used weighted method to calculate five diffusion indices (group index numbers). The 5 group index numbers and its weight are based on its leading impact on the economy. Including: new orders index, weighted 30 percent; production index, weight is 25 percent; employees index, weighted 20 percent; supplier delivery time index, weighted 15 percent; raw materials inventory index, weighted 10 percent.
5. Seasonal adjustment
The purchasing managers’ survey is a monthly survey, data fluctuations which affected by seasonal factors. Now the released PMI composite index and sub-index are seasonally adjusted data.
